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If you're reading TwoCents, you're likely seeking guidance to enhance your financial life. Whether it’s to become more disciplined with your money, sharpen your investment skills, or simply maintain a daily focus on your finances, this advice is for you.
While there are numerous approaches to improving your finances, it all begins with understanding what's truly significant for you and your family: What are your core values and priorities? Once you’ve determined those, the steps to take will become clearer.
To help clarify what matters most to you, here are 31 thought-provoking questions from Jonathan Clements, a former personal finance columnist for The Wall Street Journal and current editor of Humble Dollar. These questions will help you 'squeeze maximum happiness from your spending' and chase the goals that truly count:
If money were no object, what aspects of your life would you change?
What are your biggest financial concerns?
What are the top three smartest financial decisions you’ve ever made?
What do you consider to be your three biggest financial blunders?
How much financial support is appropriate to provide to a child?
When in your life did you feel the happiest, what contributed to that happiness—and what role did money, if any, play?
What is the least amount of money you need each month to maintain your financial stability?
If you lost your job, how long could you cover your living expenses before needing to make drastic financial changes?
What financial lessons did you learn from your parents—and which of those lessons have you embraced as your own beliefs?
Think about three people you know who are financially thriving. What factors have contributed to their financial success?
Do you consider owning a nice car important, and if so, why?
Throughout an average week, which moments bring you the most joy—and which ones do you find most unpleasant?
Is accumulating wealth one of your primary life objectives?
Consider your weaknesses. Are they just common human flaws—or are they causing significant harm, including severe financial consequences?
Who relies on you financially—and how would they manage if something were to happen to you unexpectedly?
When is it justifiable to take on debt?
Reflect on your major life expenses, such as buying homes, cars, home renovations, luxurious vacations, and paying for education. Which ones brought you joy, and which ones left you feeling disappointed?
What are the big-ticket items on your wish list for the coming years?
Do you consider a home to be a sound investment? Why or why not?
What is your net worth—the total value of everything you own, minus all of your liabilities?
Does your mix of stocks and bonds align with your income, or lack thereof?
Picture your ideal retirement day. How would you spend it—and would you be content doing these activities every day for the rest of your life?
Are there children—yours or others—whom you'd like to financially support, and what kind of assistance would you want to offer them?
During the late 2008 and early 2009 period, did you buy stocks, sell, or hold on to your investments?
How much do you spend annually on investment fees?
If you weren't aware of what you hold, what you've sold, or how the markets have performed, would you still own your current portfolio?
If you calculate the value of your bonds and other interest-bearing investments, then subtract all your debts, what is your overall net bond position?
Are you on track to have all of your debt completely paid off by the time you retire?
If you were to pass away tomorrow, would your estate be left in disarray?
When was the last time you had a candid discussion about your finances with someone?
If you were writing your own obituary, what achievements would you include? What additional accomplishments would you like to be able to add in the future?
I took this question from Humble Dollar’s newsletter, but as Clements explains in his new book, From Here to Financial Happiness. he goes into much more detail about these topics.
While some of these may not be relevant to everyone, nearly all of them serve as valuable thought exercises: Do you believe purchasing a home is a wise investment for your family? What is the true goal you are working towards in your life, and how does money influence that? Who are the people who rely on you, and how much do you feel responsible for them?
Take the time to reflect on a few, or all, of the questions above, either alone or with your spouse or other important decision-makers in your life. These answers will not only provide you with clarity but also guide you toward financial freedom, whatever that means for you.
